tl;dr
The U.S. government is nearing passage of the GENIUS Act, the first federal legislation regulating stablecoins, which will impose licensing, supervision, and backing requirements on issuers. Democratic senators are seeking amendments to prevent corruption, specifically to stop former President Trump...
The U.S. is on the brink of passing the GENIUS Act, the nation's first federal stablecoin regulatory framework, set to impose licensing, supervision, and backing requirements on stablecoin issuers.
Democratic senators are actively pushing for amendments aimed at preventing corruption tied to former President Trump’s crypto ventures. Their primary concern is to stop Trump and his associates from profiting through stablecoins and influence-selling.
Introduced by Senator Bill Hagerty with bipartisan co-sponsors, the GENIUS Act establishes federal licensing and supervisory rules, mandates regular security audits for issuers, restricts stablecoin issuance to licensed entities, and bans trading of assets without full backing.
Despite initial reservations by Democrats about conflicts connected to Trump’s crypto investments, most have come around to supporting the bill—except Senate Minority Leader Chuck Schumer, who remains cautious.
Senators Jeff Merkley, Elizabeth Warren, and Chuck Schumer are championing amendments to embed anti-corruption safeguards before final Senate passage. Alongside them, Senators Gary Peters, Jack Reed, Chris Murphy, and Michael Bennet lend support, signaling that failure to add these protections could result in lost Democratic backing.
Contrastingly, Senator Mark Warner argues the bill should move forward regardless of concerns, emphasizing blockchain’s permanent role in the financial landscape.
Complicating matters, Trump’s crypto company, World Liberty Financial (WLFI), recently launched a new stablecoin, USD1, which has already secured a deal as the settlement currency for a $2 billion investment involving Abu Dhabi's MGX and crypto exchange Binance.
Meanwhile, investigations are underway focusing on WLFI’s activities, probing potential illegal fundraising, abuse of political power, and foreign influence.
This legislative moment underscores the U.S.’ evolving approach to regulating cryptocurrencies amid political tensions and the growing recognition that stablecoins will remain integral to the crypto ecosystem.
What do you think: Should anti-corruption amendments be a mandatory condition for passing crypto regulations, or should innovation move forward without delay? Share your thoughts as this debate unfolds.